When you’re vehicle shopping for a great used vehicle, you might come across vehicles that claim to be certified pre-owned. You may be wondering what does that mean and should you even look for these kinds of vehicles. Here’s some helpful advice about pre-owned used vehicles to take with you when you go shopping for your next used vehicle.
When Did Certified Pre-Owned Vehicles Come About
During the early 1990s, certified pre-owned programs started with luxury automakers to sell vehicles that were coming off leases or were being traded in for newer models. And, like anything else in the vehicle business, it turned into where every manufacturer had some type of program.
Manufacturers love this program for two big reasons:
1 – It generates brand loyalty
2 – It gives them the most revenue on vehicles that were already sold once before.
If you choose to purchase a certified pre-owned vehicle, the idea is that you’ll be back to purchase a new car when your pocketbook allows you to and the experience has been good.
Dealers also love the idea of prescreened pre-owned vehicles for two reasons as well.
1 – Manufacturers tend to take care of the repair costs.
2 – Their profit margins are better on certified pre-owned vehicles.
So What Makes A Vehicle Qualify For The Certified Pre-Owned Status
Okay, prescreened pre-owned vehicles are vehicles that have been put through a special inspection process by the car dealers and must meet the set standards the manufacturers have come up with. These vehicles come from an array of sources include:
- Lease programs
- Auto auctions
When you buy a certified pre-owned used car, you can get a good deal. Financing tends to be cheaper, the vehicles tend to be in better shape and the manufacturer often gives a decent warranty protection.
Once a vehicle has been given the seal of approval for being certified pre-owned, it’ll get an extended warranty with it and a dealer will tack on a higher price. In essence, any certified pre-owned used vehicle could be looked at as reconditioned new vehicles with lower prices.
At this moment, there are no defined regulations one what vehicles are or are not classified as a certified pre-owned. Federal law covers the new car warranties. However, each state has laws regarding the warranties of used vehicles. In California, there are some aggravating motor vehicle standards. However, it’s got a great Car Buyer’s Bill of Rights in regards to dealer approved pre-owned vehicles that other states should consider adopting.
Manufacturer Certified Pre-Owned Programs vs. Third Party Certified Pre-Owned Programs
Manufacturers – They allow vehicles five years or newer with less than 60,000 miles to be considered certified so long as they pass inspection. The amount of inspection points varies: Ford needs 115, Audi needs 300. Porsche will sell certified pre-owned vehicles that are six years old and have 100,000 miles on them. Ford, however, has a four year old, 50,000 miles cut off. Make sure to look at Kelley Blue Book to get an in-depth idea of all the manufacturer’s programs.
Third Party – These kinds of programs need to be taken with extreme caution. They’re not affiliated with manufacturers and you’ll pay additional monies for them. When something on your vehicle goes wrong, that part of the vehicle may not have any coverage. These can be real shady too since the company you have your warranty with can close up shop. A manufacturer is less likely to do this.
Don’t Be Taken In By The “Certified” Phrase
Regardless of what the sticker claims to be, you should always have a used car inspection before you buy a vehicle. All sales reps will say that the vehicle is a cream puff and that you have nothing to be concerned about. After all, they want to close the deal on vehicles and be free of it. Get a third-party vehicle inspection from a mechanic you know and trust. You’ll be better for it in the end.